Following a decision by the Canadian Transportation Agency (CTA), Flair Airlines Ltd. can continue to operate domestically, putting an end to months of debate regarding the bargain carrier's future.
The Edmonton-based airline, which offers low tickets and no frills service for flights across Canada as well as to the United States and Mexico, was facing the loss of its domestic operating licence due to concerns that it had broken Canadian foreign-ownership regulations.
At a news conference on June 1, CEO Stephen Jones stated, "We’re thrilled to receive the positive decision today from the CTA which reinforces that Flair is a Canadian airline. The question has been answered. It’s done.”
In March, the CTA conducted a preliminary inquiry and discovered evidence that the corporation did not meet the conditions for Canadian ownership of a domestic airline. A minimum of 51% of a domestic airline's voting shares must be Canadian, and no more than 25% of voting interests can be held by a single non-Canadian firm or person, according to federal law.
Flair's agreement with Miami-based 777 Partners LLC, which has a 25% investment in the airline, worried the regulator. The CTA claimed that because the American investment group controlled the board of directors, it had "control in fact" over Flair because the airline relied on it for funding and aircraft leasing.
The private equity firm was also thought to be involved in the management of Flair's company.
Following the preliminary investigation, the CTA acknowledged that Flair had made modifications to minimise 777's effect.